Bank Stocks: The Beatings Will Continue Until Morale Improves

By Mark Gongloff

Hope you enjoyed your one-day reprieve from the beatings, bank stocks, because it’s sure over now.

The S&P 500 financials are down 1.9%, worse than just about every other sector or index you can think of and leading the broader market’s very bad, no-good day.

What’s bothering the banks this time? Could be this morning’s new Fed proposals on bank capital, including a plan to hold annual stress tests. Sounds fun!

Newswires reports:

The Federal Reserve on Friday proposed a new rule that would require the biggest U.S. banks to develop detailed capital plans and submit them for federal review before increasing dividend payments or making stock repurchases.

“In some cases, such as when institutions’ capital plans have been rejected by the Federal Reserve, firms would be required to receive approval from the Federal Reserve before making capital distributions,” the Fed said in the proposal.

The rule is aimed at banks with more than $50 billion in assets; there are about 35 that would be affected, the Fed said.

Thanks for reading MarketBeat. We would like to direct you to MoneyBeat, the Wall Street Journal’s brand new global blog. MoneyBeat unites MarketBeat, The Source, Overheard and all the Deal Journal blogs, bringing together all the market, M&A, IPO and hedge-fund news from those blogs into a 24-hour hub for finance news. Check it out and let us know what you think at moneyblog@wsj.com.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.